In keeping with the alert on debt reduction companies issued by the Financial Consumer Agency of Canada (FCAC) on Tuesday, we thought we’d follow suit and perhaps shed a bit more light on the situation. We all know the cautionary saying “If it sounds too good to be true,” but it seems that many consumers don’t realize that this extends into the debt resolution world as well.

The number of companies marketing themselves as debt consultants and credit counselors alike has been increasing over the past few years (in this economy is it any wonder?), these firms bringing with them a slew of promises to get YOU out of debt. For some, what they offer may prove a sound plan to attack those mounting bills, but for most they’re simply not doing anything for you that you couldn’t do yourself.

Furthermore, most Debt Consultants are unregulated, unsupervised and offer NO guarantees. In other words, as you congratulate yourself on managing that burdensome debt load and you make the agreed-upon monthly payments to Mr. and Mrs. Debt Consultant, you will probably find that their fees are the first bill to be paid, and interest is still accumulating on your initial debts – not to mention the collection action that will continue or even escalate.

Other claims that these types may make along the lines of “government approved” are also not worthwhile; debt settlement programs are government-approved as much as the fabulous shoes you’re wearing. The enforcement of minimal industry regulations does not equal government approval of how or what a business is selling!

Remember, friends – use caution and your common sense when evaluating a company’s claims, particularly where your finances are concerned. One simple and handy thing to always remember is that it should never cost money to talk about your debt! Often debt consultants will charge a fee to essentially refer you to a Trustee in Bankruptcy or Consumer Proposal Administrator, who will then provide you with a free consultation. Why free, you ask? Because Trustees/Administrators are the only people licensed to administer bankruptcies or consumer proposals! They are regulated and overseen by Industry Canada, and the federal act that binds them guarantees protection for individuals and creditors alike.  Trustees are bound by a rigid code of ethics that requires them to honestly and impartially assess your situation and provide you counsel that is in YOUR best interest.  We know, it almost sounds too good to be true!

Click here to access the FCAC Consumer Alert issued January 10, 2012.

Are creditors harassing you? Are the endless phone calls and collection letters causing you stress? Are you living on your credit cards? Are you unable to maintain your minimum payments? Are you being pursued for government debt? If you answered "yes" to any of these questions, you are not alone. In the twelve-month period ending July 2016, more than 66,000 Canadians were in the same financial position and found relief by seeing a Licensed Insolvency Trustee and filing personal bankruptcy. Another 57,000 Canadians settled their debt management problems by filing a consumer proposal.

If you are not a resident of British Columbia, more information is available about bankruptcy in Canada.

No matter what the cause of your financial difficulties, the Bankruptcy and Insolvency Act does not restrict a person from filing personal bankruptcy or making a consumer proposal. For example, you could be in financial trouble due to the loss of employment, a divorce, a leaky condo, medical problems, gambling, substance abuse, or poor money management. Regardless of the reason, filing personal bankruptcy or making a consumer proposal to your creditors is based upon your unique individual circumstances and is ultimately your personal decision. In BC, both of these remedies can only be filed by utilizing the services of Licensed Insolvency Trustees. At Sands & Associates, our Licensed Insolvency Trustees understand that most people file into bankruptcy or make a consumer proposal to creditors because of unfortunate circumstances, and we will guide you through this difficult time. 

Personal bankruptcy or a consumer proposal to creditors can provide shelter from the financial storm. Each will stop virtually all legal proceedings, garnishees, and phone calls from your creditors. These legal remedies provide a fresh start by pardoning your debts including credit card debts, lines of credit, legal bills, utility bills, medical bills, automobile insurance, judgments, government debts, etc. A Licensed Insolvency Trustee can help you understand the relative merits of each of these debt management options within BC. 

At Sands & Associates, we make filing personal bankruptcy or making a consumer proposal to creditors simple. We will arrange for a free initial consultation with one of our knowledgeable staff to discuss your financial status, and help you to determine whether bankruptcy or a proposal to creditors is the right choice for you.

Should you choose to file personal bankruptcy or make a consumer proposal to your creditors, we will process the necessary paperwork, arrange for possible meetings with creditors, provide two credit counselling sessions at our convenient offices located in Vancouver, Burnaby, New Westminster, Richmond, Surrey, Langley, Coquitlam, Maple Ridge, White Rock, Abbotsford, Chilliwack, Victoria, Nanaimo, Kamloops and Kelowna. 

After you have filed personal bankruptcy or a consumer proposal, you are required to perform your duties as outlined in the Bankruptcy and Insolvency Act. Some of the duties in a personal bankruptcy include keeping the Licensed Insolvency Trustee informed of your current address, declaring your monthly income and expenses for a minimum of nine months, attending two credit counselling sessions, and paying the Licensed Insolvency Trustee an amount that is dependent upon your income and the assets that you own. 

If this is your first personal bankruptcy, the earliest that you will be eligible for your discharge is nine months after your date of filing. A discharge from bankruptcy means that your debts will be eliminated and your creditors can no longer pursue you for the outstanding amount owed. It provides peace of mind and a chance for a fresh financial start. 

If you choose to make a consumer proposal to your creditors and if the creditors and the court accept it, the contract is binding between you and the creditors. A certificate of completion, which discharges your indebtedness, will be given as long as you meet the terms of the contract and remit the appropriate funds or assets to the Licensed Insolvency Trustee.